Wirtz Law Blog

The recent decision by the Supreme Court of California in the case of Lisa Niedermeier vs. FCA US LLC is a game-changer for California’s lemon law. This landmark ruling, which upholds the consumer’s rights under the Song-Beverly Consumer Warranty Act, could be crucial in your Lemon Law case. It’s vital that you understand the implications of this case and seek the guidance of a California lemon law attorney. 

California Lemon Law Protections 

The Song-Beverly Act provides comprehensive protections for consumers who purchase or lease new vehicles. This law mandates that if a vehicle manufacturer cannot fix a vehicle to conform to the manufacturer’s warranty after a reasonable number of attempts (at least two), the manufacturer must either replace or repurchase the vehicle.

Critical protections under the Song-Beverly Act include the following :

• Reasonable repair attempts. The law allows the manufacturer opportunities to repair the vehicle. If the defect persists after a reasonable number of attempts (which can be as few as two attempts), the consumer may seek a buyback or replacement.
• Restitution for consumers. Consumers are entitled to a refund or replacement vehicle, which includes the purchase price, taxes, registration fees, and other official costs.
• Coverage of various costs. In addition to vehicle costs, the law covers incidental and consequential damages related to the defect, such as repair and rental vehicle expenses.
• Civil Penalties. Should the manufacturer willfully fail to repurchase or replace a vehicle that is a lemon, the consumer may also be entitled to receive civil penalty damages. Civil penalty damages are damages in addition to a consumer’s actual damages and can be equal to as much as two times actual damages.

The recent Supreme Court of California decision in Niedermeier vs. FCA reinforces these protections, clarifying that the statutory restitution remedy should not be reduced by the trade-in credit or sale proceeds of the lemon vehicle. This ruling underscores the Act’s intent to fully compensate consumers for their losses and prevent manufacturers from evading their responsibilities. By upholding these robust consumer protections, the Song-Beverly Act ensures California vehicle owners have strong legal recourse when facing a lemon vehicle.

Background of Niedermeier vs. FCA US LLC

In this case, a vehicle owner purchased a new Jeep Wrangler from FCA US LLC, only to discover it was defective. Despite several attempts to fix the problems, the issues with the vehicle persisted, significantly affecting its usability and reliability. When the owner requested that FCA repurchase the defective vehicle under the California Lemon Law, FCA declined. This refusal forced the owner to trade the car for another model, receiving only a trade-in credit as compensation.

Undeterred by the manufacturer’s refusal to acknowledge the vehicle’s defects and provide a fair resolution, the owner took a stand and initiated legal action against FCA. The lawsuit, filed under the Song-Beverly Consumer Warranty Act, accused FCA of breaching the warranty by failing to meet the promised quality and safety standards. In a significant turn of events, the jury recognized the validity of the owner’s claims. It awarded substantial compensation, affirming the vehicle’s defects and the manufacturer’s non-compliance with the Lemon law’s requirements. This case is a powerful testament to consumers’ challenges when dealing with defective vehicles and the legal avenues for seeking justice and compensation.

Legal Issues and Decisions

FCA contested the jury’s award, arguing it should be reduced by the trade-in amount. While the Court of Appeal initially sided with FCA, the Supreme Court of California reversed this decision. The court confirmed that the restitution remedy to be paid by the manufacturer under the Song-Beverly Act should not be reduced by the trade-in credit or the sale proceeds of the defective vehicle.

Enhanced Legal Protections and Manufacturer Accountability

The recent Supreme Court ruling in California is a watershed moment for vehicle owners, significantly bolstering the protections offered by the Lemon Law. This decision mandates that manufacturers fulfill their obligations comprehensively, prohibiting them from reducing the restitution owed through trade-in or sale values of defective vehicles. This enforces consumer rights and conveys a stern message to manufacturers about the gravity of complying with the Lemon Law’s stipulations.

Variability in Manufacturer Litigation Rates

An analysis of lemon law litigation in California between 2018 and 2021 reveals a notable disparity in how frequently different manufacturers are taken to court. Toyota, for instance, faced a lemon lawsuit once for every 2,029 new vehicles registered in the state. In contrast, General Motors experienced much more frequent litigation, with one lawsuit for every 78 new cars registered. This stark contrast indicates that consumers with GM vehicles were significantly more likely to file a lemon lawsuit than those with Toyotas, highlighting the inconsistencies in vehicle quality and reliability among manufacturers.

The Importance of Lemon Law Protections 

These statistics shed light on the variability in manufacturing standards and emphasize the necessity for strong consumer legal protections. The varying litigation rates among manufacturers underscore the different challenges consumers encounter, highlighting the need for a legal system that robustly supports their rights to just resolutions.

The Supreme Court’s Consumer-Centric Approach

The Supreme Court’s interpretation of the Song-Beverly Act reinforces its consumer-protective intention. By disallowing reductions in restitution from trade-in credits, the court aims to prevent manufacturers from postponing compliance with the law, safeguarding consumer interests and prompting manufacturers to rectify vehicle defects efficiently and equitably. For California vehicle owners, the Supreme Court’s ruling increases confidence in the Lemon Law’s capacity to offer substantial protection against defective vehicles. 

Are You Interested in Learning More About the California Lemon Law’s Protections?

If you recently purchased a new or used vehicle, and you believe that you may have ended up with a lemon, reach out to the dedicated California Lemon Law attorneys at Wirtz Law APC. Our attorneys have successfully handled countless Lemon Law claims on behalf of vehicle owners across California, recovering more than $70 Million on behalf of our clients. We’ve also been successful in more than 98 percent of the cases we’ve handled. To learn more and schedule a free consultation today, call us at 858-259-5009. You can also connect with us through our secure online contact form.